Windows 2003 Server Application Server

I have a small ofice with 5 computers each one running a different application. I want to add an Application server on my network in order all application to be installed there. My OS is Windows 7 Professional. My questions:1) In order to add the Application server on my network, should be Domain controler as well? Or this is not necessary?2) Should buy Windows server 2003 or 2008? For my work, it has any diference?3) Is smth else i should know before i buy the server?

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